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Tips for Inculcating Money Saving Habits in Your Child

Tips for Inculcating Money Saving Habits in Your Child
May 29
05:43 2015

It is said that a person who has figured out how to manage his finances is one who is not just able to go through the day without any worries but is also relaxed about his future. This in itself is indicative of how important it is to inculcate in your child money saving tips from a young age. Because habits cultivated during childhood tend to endure lifelong, money saving habits gained during childhood are likely to remain with the child as he passes through his teen years into adulthood and other phases of his life.

Many parents expect schools and colleges to impart financial education to the child but what has been observed amongst grown-up children is that they often practice money-saving methods that they might have picked up from their parents. Therefore, as a parent, therein lies the importance of teaching your children not just the ‘why’ of saving money but also the ‘how’ that would enable them to achieve this goal. For parents who are clueless as to where to begin, it is as simple as opening a discussion with your child on the topic and taking a single step at a time to help him grasp the basics of financial management.

Following are some of the tips that you could use as guidelines to teach your child how and why to save money –

Explaining the value underlying saving of money – While learning to count money is one of the first steps towards handling, it is something that children pick up quickly and are able to put into practice almost immediately. What is more difficult is to teach them how to handle in terms of saving and spending, meaning not everything needs to be spent and some of it can be saved for future use. Given the complexity of this concept, your child might take a little longer to fully comprehend how much to spend at a time and your guidance at this juncture could play a crucial role.

Render saving money a fun exercise – Understanding money could be difficult for children who are very young and an easier way would be to use either coupon system or jars, wherein each jar would contain the amount required for buying a particular item. Coupons could be used for TV programs and DVDs’ while jars could be used for toys, picnics or spending on junk food like pizza, burgers or chocolates.

Leading by example – One of the best ways to motivate a child for saving money entails including him in household discussions pertaining to financial management and drawing his participation as though saving is a family activity. Most of the children follow in their parents’ footsteps unconsciously and watching adults in the house save money during childhood is likely to create an indelible impression that will last throughout his lifetime.

Offering rewards for saving money – Just like a child is offered a reward every time he does a good deed, he can also be rewarded for saving money on the basis of certain parameters. For example, a reward could be set for not spending money over a fixed duration or for spending money prudently rather than squandering away the entire amount on a meaningless purchase.

Savings bank account – Nowadays it is common for banks to offer accounts for children with parents functioning as guardians of the account. You can open an account with your child’s knowledge and involve him in all the formalities including checking the balance in the account and operating the ATM to withdraw money. This would offer a good opportunity to explain interest rates too not to mention the significance of comparison shopping wherein the bank offering best returns should be preferred over the others.

Playing money related games – Some board games, like Monopoly and Game of Life to mention a few, are based on money and playing these with the child could serve the purpose of clearing financial concepts. On playing regularly, your child is bound to get a hang of how things work and prepare for the onslaught accordingly.

Just like the way habits like brushing teeth, indulging in daily exercise and personal hygiene are drilled into children when they are young, the same rule applies to money saving tactics too. When your child grows up and goes out into the world, it is this financial training that would stand him in good stead and enable him to secure his own future.

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